One of the key findings identified in our 2014 Entertainment and Media whitepaper was the prediction of accelerated cord cutting on the part of the consumer and thus the beginnings of a-la-carte channel offerings (aka over-the-top streaming) bypassing cable subscription.
Less than a year later, this prediction is coming true. Nearly a quarter of American viewers in the coveted 18-to-34 demographic have either cut their cable or satellite services or never signed up to begin with according to an October 2014 ComScore survey. Rather, 61 percent subscribe to pay streaming services like Amazon Prime, Hulu Plus and Netflix, accessed via devices like Amazon Fire, Apple TV or Roku.
Here’s a recap of recent developments in the field:
- CBS has launched “All Access” stand-alone subscription for $5.99 streaming on CBS.com and the network’s iOS and Android apps. “All Access” does not include NFL games.
- ESPN announced plans to offer live NBA games streaming on the internet without an ESPN cable subscription.
- A&E Networks has announced a deal to provide exclusive content to Vessel, the new pay streaming-video service launched by Hulu. History, A&E, FYI Network and Lifetime shows will be made available exclusively to paid Vessel subscribers for three days, before other users can access the content for free.
- Starz announced plans for over-the-top international service to include original series along with outside-licensed content in places like the Middle East, Africa, Asia and Latin America.
- CBS President and CEO Les Moonves has commented about the network’s interest in providing stand-alone digital Showtime packages abroad. No details yet.
- In addition, Sling TV, an internet TV service of Dish Network, began offering alternative small bundles of major cable channels including the coveted ESPN programming.
- To help viewers orientate themselves in the new channel universe, the newly launched Media Aggregation Platform (MAP) will service Rabbit TV Plus's subscribers by centralizing all free and paid VOD content from across the web together with live events, streaming channels, radio stations, premium channels and more.
While GHJ identified this emerging trend last year in its whitepaper, it is interesting to see what companies are doing now to cater to consumers’ desire for personalized programming. The real tipping point is the move of major sports networks to over-the-top streaming. While many niche sports are already making the move (such as soccer streaming on Fox Soccer 2Go), I believe that cable companies will react aggressively by offering flexible bundles and discounting the internet for cable subscribers. It will be exciting to see what new trends will emerge as a result of this shift.
About Peter Klass (Contract Compliance and Forensics manager at GHJ)
Peter has over 12 years of broad entertainment accounting experience, specializes in contractual accounting and auditing. He has also consulted on entertainment litigations and currently oversees participation audits at various studios.